STEPHEN SMITH: Well if Kevin Rudd wins, he'll be the prime minister and I would expect that the Labor Party caucus would throw itself behind him with all loyalty, just as I would expect that if Julia Gillard wins on Monday - and I am confident that she will - precisely the same thing will happen, and that is what we need.

We need a united party, a united parliamentary party behind one leader, and that's why the result on Monday has to be a result which is a result with finality and put it behind us and get on with the job of governing.

TONY JONES: How could that ever be possible either way, but particularly if Kevin Rudd were to win, when your cabinet colleagues Wayne Swan, Simon Crean, Stephen Conroy, Craig Emerson, Tony Burke, Jenny Macklin, Nicola Roxon have been wading through Kevin Rudd's political blood all day?

STEPHEN SMITH: Well, Tony, any leadership challenge, and I've been through many in different guises, whether at state or federal level, there are robust things said, there are strong views expressed. And I think generally the community understands that when you are having a contest, when you're having a ballot, firm points of view are put. The most important thing is (inaudible) resolution...

TONY JONES: Can I just interrupt you there? Stephen Smith, sorry about that, but these are not just robust comments. I mean, these accounts suggest Kevin Rudd was incompetent leader...

STEPHEN SMITH: Well, Tony, let me interrupt you and make this point...

TONY JONES: ...duplicitous, a liar and a traitor to the party. I mean, these are much more than robust views. There's no going back from this sort of stuff.

STEPHEN SMITH: Well answer is: yes, there is, and you and I have both been around long enough to know that precisely the same things were said in the run-up to the first Hawke-Keating challenge, the second Hawke-Keating, challenges where Kim Beazley was deposed and the like.

So let's not think or pretend that what's occurring on this occasion is anything out of the ordinary that we've seen in previous contests whether Labor or Liberal. What is required here is clear air for the Government to get on with the job of governing.

My view is that we have done a good job of protecting the national security interests of the Commonwealth. We've done a good job of protecting our economic interests. We haven't been very good at protecting our own political interests and that has been deeply embroiled with leadership speculation and leadership disputes, so what we need to do is to resolve that on Monday and put it behind us, and I think if we do that, the community will understand.

We've still got some 16 to 18 months to go before the scheduled election. I've always been confident that this Parliament would go its full term. And if you look at the achievements that Julia Gillard has made from a minority government position, we are racking up a very significant reform program which is in the nation's interests. What we need is the clear air to sell that.

TONY JONES: OK. Now I hear you're setting out a relatively positive message there, but your colleagues are not. Why was it necessary or felt necessary to destroy Kevin Rudd's legacy in order to make the case that Julia Gillard should be prime minister?

STEPHEN SMITH: Well I think a number of journalists, a number of people, a number of members of the public have in recent times asked this question, which is, "Please explain why we went to bed one night and Kevin Rudd was prime minister and we woke up the next day an Julia Gillard was prime minister? Why was he replaced?" And given the speed with which he was replaced, I think it's a legitimate question to answer in this context. And how I analyse that, how I answer or respond to that question is to say that - in one sentence, that what had occurred by the end of Kevin's prime ministership - and people should recall that at that time if you rely on opinion polls, which I don't exclusively, he was deeply unpopular - but the real point was this: the overwhelming majority of the cabinet and the caucus and the party had come to a conclusion that if we had a difficult policy or political issue, we couldn't work that through with him. And that's why he lost the confidence of the parliamentary party and why Julia Gillard took his place.

TONY JONES: Well, Julia Gillard said it was always like this, always, he always had these bad attributes and she included his very difficult and chaotic work patterns. She's accused of him of lacking consistency, purpose, method, discipline, inclusion and consultation. Now does that reflect your experience with Kevin Rudd?

STEPHEN SMITH: Well, the Prime Minister is perfectly entitled, as she has, to put her point of view in a leadership context.

TONY JONES: But does that reflect your experience?

STEPHEN SMITH: Well I've given you my analysis, Tony. I've summarised that, but my own judgement as to why...

TONY JONES: No, but I'm trying to - I mean, you sat in these cabinet meetings. I'm trying to work out whether when Kevin Rudd was prime minister, you found all of these things to be true.

STEPHEN SMITH: Yeah, and what I'm saying is that I'm giving you my analysis. I'm articulating it to you from my perspective, and my perspective is that by the time we came to the end of Kevin's term as prime minister, the cabinet, the caucus, the overwhelming majority of the cabinet and caucus had lost confidence in the ability to work through difficult policy or political issues with him.

Now I'm not proposing to give a blow-by-blow or a running commentary. People have asked me, whether it's journalists or others, in the course of the last 24, 36 hours why the change was made and that is my analysis. My reason for strongly supporting Julia Gillard is that my analysis on that historical point hasn't changed, but more importantly, we need to strike out for the future and I think Julia Gillard gives us the best chance from a minority government position of continuing to rack up Labor Party reforms, of continuing to do things which are in the nation's long-term economic and national security interests, and that's why I'm strongly supporting her.

TONY JONES: OK, but look, I asked the question and pressing it because there's clearly disagreement even in the cabinet on this. Chris Bowen says when he needed to make a decision, or needed a decision from Prime Minister Rudd or his cabinet, it was made in an orderly and efficient way. Robert McClelland, who was Rudd's Attorney-General, says he was a stickler for process and hard work. Another of his cabinet ministers, Kim Carr, calls him a man of great breadth of vision and commitment.

So, who are we supposed to believe? Who is the public supposed to believe? You're in the same cabinet, but everyone has totally different views on how well he did.

STEPHEN SMITH: Well, and guess what, Tony: you're in the middle of a leadership ballot. You've got different people supporting different candidates. You've also got people expressing or articulating their view of history or their own personal experience. And if you get a group of 20 sitting around a table, people's personal experiences may well be different. I don't see the point in dwelling upon that. I've given you my analysis. I speak for myself.

TONY JONES: Yeah, I appreciate that you don't see the point in dwelling on it and you may well be embarrassed by the degree to which your colleagues have gone overboard on this - for example Stephen Conroy suggesting that prime minister Rudd had contempt for the public. I mean, these are extraordinary things to say, wouldn't you agree?

STEPHEN SMITH: Well, Tony, I'm not embarrassed by the comments that any of my colleagues have made in the course of what is a robust leadership challenge, a robust leadership ballot, a robust leadership dispute. And I'm not going to be embarrassed by [the] failure to give to you the answer that you want rather than the answer that I'm giving. I'm giving you my analysis.

TONY JONES: OK.

STEPHEN SMITH: And my own judgment...

TONY JONES: Alright. But one can't help contemplating the hole that the Government has dug itself into. So let me ask you this: how you can reconcile these two stories.

"Under Kevin Rudd we were a brilliantly competent, sure-footed government that managed the GFC better than almost any other country," versus: "Under Kevin Rudd, cabinet was indecisive and a chaotic mess"?

How do you reconcile those two stories?

STEPHEN SMITH: Well, we can start playing pick-a-box if you like, Tony.

TONY JONES: This is not pick-a-box; these are fundamental issues. Because the Government goes out there and says, "We are the government that saved Australia from the GFC." That was under Kevin Rudd as Prime Minister. At the same time, we're being told as Prime Minister he was totally incompetent.

STEPHEN SMITH: Well, Tony, with the greatest of respect, you can answer your own questions or you can let me give you the answers. Now, I think the two finest things that occurred under Kevin Rudd's prime ministership were firstly the apology, and secondly the stewardship over the Global Financial Crisis. And they are, I think, lasting legacies. I don't dispute those. I don't seek in any way to decry or detract from that so far as Kevin's legacy is concerned.

My point is that at the conclusion or at the end of his prime ministership he had lost the confidence of the Cabinet, the vast bulk of the cabinet and parliamentary party and as a consequence we saw a change.

We now need to make a judgment about the party interests, the Government interest and the national interest going forward. My strong view is that the best option for us is to continue under the leadership of Julia Gillard as Prime Minister. I think she's got the attributes to continue to make genuine Labor reforms and to, under her stewardship, manage the economy and manage our national security interests from a minority government perspective. And whether in reverse chronological order, it's making sure that low-income people don't subsidise you or me for private health insurance, whether it's a Minerals Resources Rent Tax on the profit of mineral resources, whether it's a tax on pollution or a price on carbon - all of these things are substantial changes for which she should be given credit. And my own judgement is we should endure with her, and if she gets some clean political air, we actually have a prospect in 18 months' time of people seeing a comparison between her and Tony Abbott and us and the Liberal Party.

TONY JONES: Now I spoke privately to one of the most senior figures in the Labor Party today and his view is that the senior people in the Gillard camp have decided it'd be better to lose the next election under Julia Gillard than go back to Kevin Rudd. Do you accept that?

STEPHEN SMITH: Well, I'm old-fashioned, Tony. I start from the view that the most important thing that the Labor Party nationally can do for the Australian people, particularly low and middle-income people who historically and to today look to the Labor Party as the institution in society which will give it a helping hand, that we have an obligation and responsibility every time we front up to an election to do our best to win, and if we are elected, to do our best to continue to effect major and structural reforms.

TONY JONES: No, but with all due respect - Stephen Smith, I'm worried to interrupt you again, but that's not really answering the question. The question is...

STEPHEN SMITH: Well if you let me finish, Tony, the answer would be - if you let me finish, the answer would be: ...

TONY JONES: Well we don't have all night, frankly.

STEPHEN SMITH: ...that I think Julia Gillard gives us the best - well, if you stopped interrupting, Tony, we might have more chance.

TONY JONES: Well, if you answer the question we might get to the answer quicker. Now what I'm asking is...

STEPHEN SMITH: Well the answer to the question is: I think Julia Gillard gives us the best chance to do that.

TONY JONES: Is Kevin Rudd so hated by the cabinet or by senior members in the cabinet that they would rather lose an election than go back to him.

STEPHEN SMITH: No, I start and my colleagues start from this view: the most important thing we can do is to form a Labor government. I've formed the view that our best prospect for that is to continue to support Julia Gillard.

Now some of my colleagues, whom I respect, who I deal with on a professional and personal basis, have taken a different view. That's entirely their capacity and ability and judgment to do so. The most important thing is that when we resolve it on Monday, that is the end of it. That's what gives us the best chance to proceed and the best chance at winning the next election.

TONY JONES: OK. Evidently, Kevin Rudd remains very popular with voters and he's appealing to them over your heads. Do you think the public is going to buy the confused narrative about what a nightmare it was when he was the prime minister?

STEPHEN SMITH: Well the people who have the obligation to discharge, the responsibility to discharge in terms of choosing the Labor leader on Monday are members of the parliamentary Labor Party. And I'm sure that my colleagues will take into account very many factors, including what the public view may be or what their local community view may be. But in the end, we're the ones who've got to make the judgment.

I've let you know very clearly what my judgment is. I think that gives us the best chance of persuading the community in 18 months' time that we should be re-elected in the face of a Tony Abbott Liberal Party.

But people are perfectly entitled to take into account whatever views are put to them and make their own judgments, but in the end it's the judgment of the Labor caucus that will prevail on Monday. My own judgment, as I've said, is that I think the community understands that these are pretty robust contests. The most important thing is once they're resolved, to end it there and to finish it and to move on.

TONY JONES: I think the community probably will find it difficult to understand that what appears to be open, naked hatred can be put to one side at the end of the vote. And so what I'm asking - because we've seen you without emotion, without passion, put a positive case. This is not what your colleagues have been doing. They've been putting a negative case, destroying a man who was a prime minister, who led Labor to an historic victory. Do you think the public will accept that?

STEPHEN SMITH: Well, Tony, each of us put our analyses, our point of views in different ways and the way in which we choose. I've seen people out there today supporting Kevin. I've seen people out there strongly opposing Kevin. That is the nature of a leadership ballot and contest. I've seen over the years people make the same comments about the Hawke-Keating battle, that after the Hawke-Keating battle, phase one or phase two, you could never re-elect a Labor government again.

Well Paul Keating went on to win an election. So, in the end, the choice that the community has to make is a choice between the Labor Party and the Liberal Party, a Labor government and a Liberal opposition. And if we can put these issues behind us after resolving it finally on Monday, I still think we are competitive and have a chance in that respect.

TONY JONES: With all due respect, I don't think that Bob Hawke was ever called effectively a traitor to the party, a liar or called duplicitous or called someone who could not manage a cabinet.

STEPHEN SMITH: Well, Tony, I personally heard people who became senior ministers under him say the most outrageous things about him before he became the leader of the Labor Party and while he was the leader of the Labor Party. So, let's not pretend...

TONY JONES: Yeah, but they didn't - you may have personally heard that, but what I'm saying is the public is now being exposed to this naked level of aggression and I'm wondering how you think they'll cope with it?

STEPHEN SMITH: Well, Tony, time will tell whether your analysis is correct or my analysis is correct. My own judgment, after many years of observing and being an active participant in party politics and parliamentary politics, is that the community understands when there's a fight on, whether it's Howard and Peacock, Hawke and Keating, Beazley and Crean. Once that's resolved they want to see people getting on with the job and that is the most important thing for us to do from Monday morning.

TONY JONES: OK. Final quick question: given what we've been talking about and given the level of the animosity, the extreme nature of the statements, do you really believe Kevin Rudd will give it all away if he loses on Monday?

STEPHEN SMITH: Well I think, Tony, whoever wins or loses on Monday, there'll be a very strong view in the caucus that that's it, that enough is enough. When Kevin became leader in 2007...

TONY JONES: You'll all be good buddies again; that's possible, is it, after saying all these things about each other?

STEPHEN SMITH: No. When Kevin Rudd became leader in 2006 he said at the caucus meeting in which he was elected that there then had to be a zero tolerance for ill-discipline in the party and I think the same rule has to apply from Monday. We've got a responsibility to the party, to the Government and to the nation to put this behind us and get on with the job of continuing to effect major reform in the interests of our economy and the interests of our national security.

TONY JONES: Stephen Smith, we thank you very much for taking the time to come in and talk to us tonight.

STEPHEN SMITH: Thanks, Tony. Thanks very much.

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